Khan Concedes Defeat in Effort to Oust ICN Chairman Panic

Rafi M. Khan, the dissident investor seeking to oust the chairman of ICN Pharmaceuticals Inc., conceded defeat Monday but vowed to keep pressing for management changes at the company.

Shareholders are to vote at the company’s annual meeting today on a proposal to replace Chairman Milan Panic and the other eight ICN board members with a new six-member slate that would include Khan, who owns 120,000 shares of the pharmaceutical company’s stock.

“I may lose, but I am not a quitter,” said Khan, who is also wrestling with criminal allegations that surfaced as a result of ICN’s efforts to discredit him.

Khan launched his effort to unseat Panic in April, accusing the 63-year-old chairman of drawing an excessive salary and of breaking federal laws by managing the Costa Mesa-based firm while serving as prime minister of his homeland, Yugoslavia.

But Khan’s campaign for changes in ICN’s boardroom was all but scuttled when questions arose about his own past, including allegations that he fled the United Kingdom under a cloud of suspicion that he was involved in a securities scam to defraud the British government.

ICN officials, who had long predicted they would easily win the shareholder vote, responded to Khan’s statement Monday with guarded enthusiasm.

“We appreciate his concession,” ICN spokesman David Calef said.

But the company will not back off from its feud with Khan, whom it charges in a lawsuit with using inside information to wage a proxy fight, Calef said. ICN has already spent millions of dollars to fend off Khan’s challenge.

Though many investors share Khan’s displeasure with ICN’s management, the largest institutional shareholders, who control more than 10% of the company’s stock, are expected to stand behind Panic. Some observers estimate that ICN can expect to garner 70% of the shares voted today, compared to the 30% pledged to Khan.